In this episode of the Raise Capital Legally podcast, Daniel Kleyman, a real estate developer from Richmond, Virginia, shared his expertise on build-to-rent projects. Daniel discussed his journey from renovating houses to developing ground-up projects since 2008. He emphasized the importance of geographic concentration, managing properties within a 10-minute drive from his office, and maintaining in-house property management. Daniel detailed the five essential steps for evaluating land for development, including zoning analysis, site constraint assessment, density studies, financial feasibility analysis, and construction financing strategies. He also shared insights on construction financing, project management challenges, and the importance of building local relationships with regulators, contractors, and brokers. The discussion highlighted the current market challenges, including rising interest rates and construction costs, while emphasizing the long-term potential of real estate development.

Introduction and Background of Daniel Kleyman (00:01:55)

Daniel Kleyman introduced himself as a real estate developer based in Richmond, Virginia, with experience since 2006. He transitioned from renovating houses to development in 2014, specializing in building apartments, mixed-use projects, and maintaining a rental portfolio through in-house property management.

Geographic Concentration and Property Management Strategy (00:04:02)

Daniel discussed his strategy of maintaining tight geographic concentration, operating within three neighborhoods and keeping all properties within a 10-minute drive from his office. He emphasized the benefits of in-house property management for maintaining quality and efficiency.

Land Acquisition and Financing Strategies (00:12:04)

Daniel explained his approach to land acquisition, using cash for small residential lots and contract agreements for larger parcels. He detailed how he leverages land value in construction financing, allowing for greater leverage than purchasing existing assets.

Development Process and Team Requirements (00:08:53)

Daniel outlined the key professionals involved in development projects, including architects, surveyors, engineers, and land use attorneys. He emphasized the importance of having local experts who understand specific zoning and building codes.

Financial Analysis and Market Considerations (00:24:11)

Daniel discussed the importance of conducting thorough financial feasibility studies, using current market rents for projections, and maintaining realistic operating expense ratios. He emphasized the significance of long-term market analysis and rent growth potential.

Construction Management and Project Challenges (00:37:41)

Daniel shared insights on construction management challenges, including dealing with project delays, unforeseen site conditions, and the importance of thorough plan reviews. He discussed implementing penalty clauses in contracts to mitigate delays.

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In this episode, we explore the world of real estate investing with a focus on hard money lending and opportunistic fund strategies. Our guest shares their journey into the industry, insights on structuring a debt fund through a Series LLC, and strategies for buying defaulting loans and turning them into profitable opportunities. We discuss key investment criteria across asset classes like office spaces and retail centers, the synergy between debt and equity offerings, and the dynamics of successful business partnerships. Packed with practical advice for new investors and seasoned professionals, this episode offers a comprehensive look at creating value in real estate through innovative strategies and informed decision-making.

Introduction to Bigger Pockets and Real Estate Journey (00:02:11)

Don Konipol explained that Bigger Pockets, founded nearly 20 years ago, is a platform for real estate investors to share ideas and network. He shared his journey from banking in Switzerland to becoming a real estate broker in Houston in 1978, starting his investment career in 1981.

Evolution into Hard Money Lending (00:06:33)

Don described how he pioneered hard money lending by wrapping mortgage notes in 1981, following Jimmy Napier's 'Invest in Debt' book. He formalized his business in 2001 and currently manages a series LLC fund that allows investors to choose specific notes.

Fund Structure and Investment Strategy (00:08:11)

Don detailed his fund's structure, where each note is in a separate series LLC. Investors are grouped in tranches of 10, with 24-hour decision windows. He emphasized that Mitch and he personally invest 10-15% of each offering.

Loan Types and Terms (00:20:00)

Don explained that they focus on commercial loans, with terms of 12-24 months and interest rates of 12-13.5%. They work with various asset classes, including office spaces, retail centers, and specialty deals like marinas.

Risk Management and Default Rates (00:27:20)

Don shared that their default rate is 6.7%, with most defaults being short-term. He discussed their approach to managing risk through conservative loan-to-value ratios and careful asset selection.

COVID-19 Impact and Recovery (00:31:47)

Don described how they managed through COVID-19, including working with borrowers and their experience with retail properties purchased just before the lockdown.

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Please join Attorney Kim Lisa Taylor and co-Host Krisha Young as they interview Devana Came and Reid Stadelman. Our guests will tell us how they have created sober living facilities that provide both a community benefit and rental income. This is part of our Beyond Multi-family series, where we introduce our audience to alternative asset classes that they can turn into profitable business models (or you can just invest with our guests).

Introduction to Sober Living Housing and Personal Motivations (00:00:02)

Krisha Young introduced the podcast and guests Devana Came and Reid Stadelman. Devana shared her personal connection to addiction through family experiences and her motivation to create better sober living environments after seeing inadequate facilities.

Operational Structure and Community Living (00:04:13)

Devana explained how sober living houses function as mutually supportive environments, with residents typically coming directly from rehab facilities. She described management practices, including meeting attendance requirements and house cleaning responsibilities.

Neighborhood Relations and Legal Considerations (00:09:32)

The guests discussed their experiences with neighborhood relations, including dealing with pushback from neighbors and legal protections under the Federal Fair Housing Disabilities Act. They emphasized the importance of being good neighbors and maintaining property standards.

Financial Aspects and Investment Considerations (00:38:07)

Devana and Reid discussed the financial aspects of operating sober living facilities, including potential income levels ranging from $850 to $3,500 per bed depending on location. They emphasized the importance of maintaining quality while achieving profitability.

Future Plans and Expansion (01:01:38)

The guests shared their current operations of four houses with 71 beds, soon expanding to 76 beds. They also discussed plans to add residential assisted living to their portfolio to help with elderly care.

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🗓️ Book a free 30 minute consultation with one of our business development team: https://syndicationattorneys.com/consultation